Microsoft to accept Bitcoin payments

Wants to be at forefront of growing digital currency trend.

Microsoft customers of the software giant's US online store will now be able to pay for apps and services with virtual currency Bitcoin.

Bitcoin can be added as a payment option to a users' Microsoft Account, and used to buy content in the Windows Store as well as Xbox games, music and videos, and apps for Windows Phone.

Eric Lockard, Microsoft vice president of its Universal Store, said digital currency use was growing beyond early enthusiasts.

"We expect this growth to continue and allowing people to use Bitcoin to purchase our products and services now allows us to be at the front edge of that trend," Lockard said in a statement.

The Bitcoin payment option is only currently available for customers in the US. Microsoft limits the amount that can be exchanged to US$1000 a day and US$5000 in total for all accounts registered to a certain user.

Only specific Microsoft products and services can be paid for with Bitcoin at this time, the company said.

Microsoft has signed up payments processor Bitpay for the service, which is already providing Bitcoin transaction capabilities to online electronics retailers Newegg and TigerDirect.

Despite volatility in value and some nations such as China and India restricting or banning its use, Bitcoin continues to gain acceptance as a currency.

In Australia, the Senate Economic References Committee is presently evaluating the country's options to regulate Bitcoin and its use, seeking to balance the growth in digital currencies with the stability of the financial services sector.

The Australian Taxation Office earlier in the year released its guidance on Bitcoin for tax purposes, exempting smaller investors from capital gains tax as long as they stay below A$10,000.

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